Market Trends

June 2022 Market Update

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Lately, we’ve been having conversations with each other, our clients, and others in the industry both locally and around the country to better understand what is happening today in the real world and the Northern Virginia real estate market. Lots of questions are being asked. Do we have a housing bubble in Northern Virginia? Are prices going to crash? When are prices coming down? Should I wait for prices to drop before I buy? Why is it taking longer to sell a house? How high will rates go? Should I sell (or buy) now or wait? 

In my opinion, prices will not be escalating at the rate they were previously. Those dramatic price increases were not sustainable. There may be pockets where prices decline, but we still have high demand at most price points.

Additionally, our price increases were not as drastic as in other parts of the country. According to the FHFA Top 100 Metropolitan Markets Ranking, we rank 99 out of 100! Other parts of the country will see higher price drops, but our area should remain stable. We will not have a “housing crash” in Northern Virginia. 

Don’t wait to buy real estate – buy real estate and wait. Buy because of your lifestyle, needs, and wants – and not strictly because of prices. Buy for the long term, not the short-term gains. Yes, the market has slowed down. Buyers are not “rushing” into buying decisions like they were previously, but remember – that type of market cannot be sustained. It is still a seller’s market. It’s a good thing when a house is on the market 7-10 days.  

If you are thinking of selling soon, give me a call. Rates are going up on 30-year fixed mortgages, but you do have alternatives – most notably, adjustable-rate mortgages and buydowns. The adjustable-rate mortgages are a great option and not what they were when the real estate market crashed in the past. Buydowns give you another option, with lower than 30-year fixed rates. Let’s discuss why these are often viable options for buyers. If you are looking to sell or buy – now is a great time, so call me to learn more.

Enjoy the last few days of Spring before the summer heat kicks in!

April 2022 Market Update

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How about this weather? Cold temps, blustery winds, snow, sleet, and sometimes sunshine and warm temperatures all on the same day. It’s so crazy; I can’t figure out what to wear today! These conditions remind me of the real estate market in Northern Virginia this last month. One house had 100 visitors and multiple contracts in two days; another had 15 visitors and one contract in four days – in the same neighborhood one week apart. We also have a house that has been on the market for more than two weeks with just a handful of showings and no ratified contract. As I always advise, you must have the house in pristine condition, priced right, and in a great location to get the most activity as well as contracts. If you think you can sell anything in this market, you are far from reality.

The real question of the month is, “when should I put my house on the market?” Interest rates have impacted the market as they continue to rise. We’ve had the most volatile few weeks of increases, with rates topping out at over 5%. This has some buyers looking to buy sooner rather than later (many believe rates will continue to rise), and they want to get in today. Another aspect to consider when I’m asked this question is the number of houses for sale – especially in your neighborhood. Overall, in Northern Virginia, inventory levels are down 29% from this same time last year – but inventory is rising. I also consider pricing when answering this question. Prices are up over 9% from last year, but with rising interest rates, inflation, and more homes for sale, price increases will not be as substantial as earlier this year. My answer is simple – get your house on the market sooner rather than later. Call me today if you are considering selling and want to see how this impacts you.

So how does all this impact buyers? If you are financially stable to buy a home, don’t wait – just go for it. Remember to buy for the right reasons – lifestyle, distance to work, and schools to name a few, just don’t forget what your why is. Don’t expect mortgage rates or home prices to come down because neither is going to happen for the foreseeable future. Waiting will cost you more. As the saying goes, ‘don’t wait to buy real estate; buy real estate and wait.’ If you are thinking about buying, call me, and we can discuss your situation in more detail.

In the meantime, have a great spring. Hopefully, the weather will begin to normalize soon!

March 2022 Market Update

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For me, the word of the month is ‘strategize’…and that’s because the real estate market is moving fast and furiously. If you don’t have a strategy, you will not be adequately positioned as a seller or a buyer. If you are a seller, do you fix up your house or just list it in its current condition? Do you price it low and hope for multiple offers? Do you price it at market and expect a few offers – or maybe just one? Or do you price it high and hope a frustrated buyer is willing to pay any price?

If you are a buyer – do you use an escalation clause? Do you waive all contingencies? Do you offer a free Post Settlement Occupancy Agreement? Do you want to add an appraisal gap statement? Do you take it “as is”? So many questions need to be addressed; each situation is different and should be analyzed individually. The good news is that I have the answers for you, whether you are looking to sell or buy in today’s market, who you work with matters!

As you know, not every house will sell just because of the market. You still need to have the right strategy to get it sold. On the flip side, a strong offer can position you to win over multiple other contracts with the right strategy, so call me to discuss your situation in more detail. I am always here to help.

I am getting many real estate-related questions lately – will the rising interest rates hurt the market? Will the market be impacted by the Feds increasing their rates overnight? Will the Ukraine situation slow down the real estate market? Will rising gas prices impact real estate? How does rising inflation affect the real estate market? So many good questions. Here are the answers – at least the ones I have today. Mortgage interest rates remain at historic lows, and as a matter of fact, they are below where they were before the pandemic started. Mortgage rates would have to get to the 6% range before they began to impact the market, and the government won’t let this happen. Presently, rates are at 3.75% for conforming loans – a reasonable rate, in my opinion. The Fed rate increases do not directly impact mortgage rates, so this will not be a considerable influence. Rising gas prices may hinder a few first-time buyers from entering the market (they are budget-conscious overall), but this will not slow down home buying demand. Inflation may hinder some people from buying, but in the end, it won’t affect our market. We are receiving multiple offers across all price points, so we will still have a robust real estate market even if half the buyers drop out. Lastly, if it gets worse, the situation in Ukraine may impact housing. At this time, it is helping to bring rates down, but it hasn’t slowed demand or slowed price appreciation. Only time will tell, but all is good on our real estate front right now.

There are many scenarios and questions out there but know that I am here to help answer them. Just give me a call to discuss everything with you!

Happy St. Patrick’s Day!

February 2022 Market Update

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Didn’t that feel like the fastest January ever? I blinked, and it is already February. It seems like we were just celebrating New Year’s Day yesterday. It must be the pace of the real estate market that makes time fly. This January’s housing market has been the hottest on record. Last month 45% of homes found a new homeowner within two weeks and 35% received a contract within one week. As demand remains strong, the question is – will we have enough inventory to keep up with this demand? Time will tell. If you have thoughts of selling or know someone who wants to sell, now is the time to act. Currently, we only have half a month’s supply of housing available. This means that if no new homes came on the market, everything would be sold in two weeks!

The National Association of Realtors says that a 6-month supply of homes is a balanced market. Do you know when the last time we had a 6-month supply of houses was in Northern Virginia? I have been keeping weekly records since March of 2005, and the most supply we have had per month is 4.3 – and that was in January of 2009. At that time, we had 10,129 houses for sale in Northern Virginia. Today we have only 1,069 resales available. Because inventory is so low, we see multiple contracts on virtually every listed home and have showings back-to-back all day long. I had more than 50 showings on the last home I sold. That means 49 buyers are still looking for a home in Haymarket in the $725,000 price range. If half of the buyers get buyer’s fatigue, there are still 25 people looking for a home.

Things didn’t even happen like this last year when the market was so frenetic. This market will take time to settle down. Since 1981, the average age range of a first-time buyer has been between 28 and 32; there are 23.5 Millennials in this age group today.

Even though the competition is stiff, we can still help if you are considering buying. We have developed strategies to help you “win” in multiple contract situations – just give me a call to learn more!

Happy Valentine’s Day!

January 2022 Market Update

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Happy New Year to you and yours! We are kicking off the new year with a serious demand for housing in the Northern Virginia real estate market. The weekend before Christmas, I wrote a contract for clients on a house in South Riding – it was the only house for sale in all South Riding at the time. In three days, there were over 150 showings and 34 contracts submitted. The house was only 2,500 square feet, had an unfinished basement, and was priced at $750,000 – crazy! The Monday after Christmas, I put a home on the market in Virginia Run. The sellers positioned the house in great condition to maximize their price. In the end, we decided to price it at $800,000. It was one of only two homes in all of Virginia Run for sale at that time. In two days, we had over 30 showings and multiple contracts resulting in a sale in which the buyers waived all contingencies, paid way over the list price, and offered settlement in just two weeks.

I believe we are entering yet another frenzied market as we head into 2022. On New Year’s Eve, I ran the numbers for our market once again, and we are now at another all-time low for inventory of resale homes in Northern Virginia. In the counties of Fairfax, Arlington, Alexandria, Loudoun, Prince William, and Fauquier, there are only 1,119 properties for sale. People say, “oh, it is just that time of year; inventory is always low now.” Looking back over the last five years, we have averaged 2,901 houses for sale this week – a huge difference, especially with all of the demand. I believe we will be in for quite a ride in real estate in 2022.

Here are my predictions for 2022 in real estate:

· Inventory will remain low –  if you have nothing to buy, you won’t sell, so inventory will stay low

· Homeowners will continue to renovate/remodel as a result of low inventory

· Demand will remain strong – 45 million Millennials between the ages of 26 and 35, which are prime home-buying years

· New home sales will be flat as construction costs, and labor constraints will hold sales down

· Prices will increase once again – it was 9.5% in 2021; I think we will be in the 6% range in 2022

· Interest rates will increase but only slightly – 3.11% at year-end 2021; I think they will go to 3.75%, which is still below pre-pandemic levels

· iBuyers will continue to increase their market share in all areas of the country

· Inflation will remain high…I think in the 6-7% range in 2022 – hopefully no higher

· Demand for rentals will remain strong, and prices for rentals will continue to rise

· Covid will continue to be an issue as well as a threat and continue to impact supply chain, which will impact the overall US economy. This, in turn, will influence people’s home buying and selling decisions.

So, there you have it – let’s check back in January of 2023 to see how I did on my predictions.

Happy New Year!

June 2021 Market Update

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Here is the update on the crazy Northern Virginia real estate market…round and round and round it goes, where it stops, no one knows. The interesting thing is the market has shifted, and it happened quickly. Was it mortgage interest rates rising so high it stopped people from buying? No. Was it a flood of foreclosures and short sales hitting the market? No. Was it a pricing bubble that popped and collapsed home prices? No. Was it regular sales coming on the market giving buyers more choices? No.

So, what has caused the shift in the market?  First, the frenzied market we experienced from mid-January through early May could not be sustained. We were experiencing 50-70 showings in only one or two days and contract numbers in the high teens to low twenties on houses we put on the market.  Additionally, we saw prices escalate tens of thousands to hundreds of thousands above list price, with buyers waiving everything to “get” a home. It was a stressful time for everyone involved – buyers, sellers, and Realtors alike.

Now, we are seeing 5-15 showings in an entire weekend, and we are receiving between one and five offers. Still excellent numbers historically, but it is, in a different way, causing stress on sellers. The expectations of sellers are what they “heard,” “saw,” or “read” about the market two months ago or more – not recent facts. Well, the market shifts on a dime with no real rhyme or reason. The one thing I feel has put a damper on the market is “buyer fatigue.” Buyers had gone out, written contracts, and lost out on many houses. They wrote what they perceived to be the perfect contract and were beat out by someone who had to have the home and irrationally made an offer the seller couldn’t refuse. The conversations I am having now with buyers and agents are – oh, they have three offers? Someone will pay too much; I don’t want to waste my time. Therefore, we are now seeing fewer offers; still, great offers – above list price and waiving contingencies, but the number of contracts and showings are just down. So, if you are a seller or considering selling, your house will sell; just realize the market is different today, not bad, simply different. On the other hand, if you are a buyer, don’t give up; fewer people competing for homes mean you have a better shot at getting one now than a few short months ago. We can help you determine your best course of action, whether buying or selling, so call us to learn more!

Have a great summer!

April 2021 Market Update

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The Northern Virginia real estate market continues to amaze me. Inventory levels remain extremely low, demand remains extraordinarily high, and this is still occurring even though rates have increased slightly over the last few weeks. I do not believe this will change or slow down any time in the near future. The level of demand is just too high.

We continue to see multiple contract situations as the new normal throughout much of Northern Virginia. It is common to see all contingencies being removed and prices set way above the original list price in these situations. In early March, I wrote a contract on a house in North Arlington that was listed for $935,000. It was a 4-bedroom, 3-bath home, and just 1,280 square feet. The offer was cash, close in two weeks with no contingencies, and my buyer offered $1,026,000. According to the listing agent, we were not even close! One of the 23 received offers went up to $1,081,000. Insane! This leaves 22 other active buyers still looking to own in that price point in Arlington – so again, I don’t see this market slowing any time soon. All the being said, the condo market is the only anomaly as most condos are sitting on the market.

So, what is going to happen is what I am often asked. My belief is that inventory will remain low for the foreseeable future as people have purchased or refinanced at exceptionally low rates. As rates increase, there will be little, if any, motivation to move. If someone has a $500,000 mortgage with an interest rate of 2.75%, what will motivate them to move to a home with a $750,000 mortgage at 4% or even higher? I think this is what will stagnate inventory levels over the next few years. People will only move if there is a genuine need to do so – like marriage, kids, schools, job, divorce, death, etc.

Speaking about interest rates, they have inched above 3% for the first time in several months, but please keep this in mind, they are still below where they were this same time last year and are still below historical lows mortgages. Earlier I mentioned rates at 4% or higher; I don’t believe we will be there for some time, so no need to worry about this happening. I foresee we will be in the low to mid 3’s for the remainder of the year.

As always, I am more than happy to speak with you about your situation in more detail as each situation is unique and personal.

Happy Spring!

March 2021 Market Update

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It’s hard to believe that one year has passed since our world changed with the Pandemic. There have been so many changes in our daily routines, the way we interact with each other, how we conduct business, and so much more. The hardest part for many of us was that we lost loved ones or could not visit them due to restrictions. Let’s hope this all changes soon with the vaccine. 

As far as the real estate world goes, it has remained resilient and has even thrived. To some, it may be hard to believe, but true. Historically low-interest rates, crazy low inventory levels, and high demand resulted in a frenzied market over the last year. Housing gained over $3.1 Trillion in equity in 2020 as prices escalated in almost every market around the country. We are only a little over two months into 2021, and we continue to see a strong housing market. Inventory remains extremely low, rates have ticked up slightly but are still very attractive, and buyer demand remains very robust. The biggest concern remains the low inventory. We continue to see multiple offer situations in all price ranges throughout Northern Virginia. Many times, contracts are being submitted without the buyers even seeing the home! Crazy but true. Buyers are conducting pre-offer home inspections, waiving all contingencies, and are bidding 10-13% over the list price to get into a home. I believe we will be in this type of market for the next few years. Unfortunately for buyers, I don’t see a flood of houses coming on the market to cover the demand that is out there today.  Interest rates will remain low to help keep the market moving. We continue to have low unemployment relative to other parts of the country, so people are continuing to relocate to our area. Couple all of this with the Millennials entering the market as home buyers; it’s quite the tsunami.

If you are considering selling or buying a home, it is more critical today than ever to have a professional representing you. Expert negotiation skills and market knowledge are essential in this aggressive market. Please feel free to call me to review your situation in more detail or allow us to help someone you know. I am always happy to help.

I am looking forward to warmer weather and more hours of daylight, and I hope you are too.  Happy Spring!

February 2021 Market Update

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Again, I have said it before, and I will repeat it, inventory levels on homes for sale in Northern Virginia are critically low! We currently have just 1,701 homes for sale in all of the counties we serve in Northern Virginia. The amazing fact is the number of condos that are currently for sale – 792 – which represents just under 50% of the total inventory. Condos typically do not reflect nearly 50% of the inventory levels … more on this later. 

Continuing with the numbers; there are only 646 single family homes currently on the market. Are you kidding me? There are only 235 townhouses total, again, WOW! Do you know what this means? The chances of multiple contract situations are possible on virtually every home on the market. We have had as many as 30 contracts submitted on one house in Gainesville priced at $635,000. It escalated above $700,000. We had another home in Aldie that had 78 showings and 62 visitors at the open house. This one was priced at $772,000 that had 21 offers and escalated to $831,700. It is insane – I cannot think of another word to describe it. 

A question I am frequently asked is when will it end? I think it will be a long time, as I believe it will be rate driven, and rates will remain low for the foreseeable future. Once rates rise to the 4 or 5% range, we will see a slowdown in contracts/purchasers, but not an inventory increase. Another question is, when will buyer burnout take them out of the market? My answer: it depends as this is and has always been an individual question. I have heard about prospective buyers writing as many as 15 contracts (on different homes) and still in the fight, while others are not even entering the market because of these “bidding” war situations. Typically, buyers will write until they win a bid on a property.  Usually, in a market like this, it has been between 3-5 times in my experience. 

One more question I hear is how do I buy if I must sell my house first? This one is more complicated, but I can give you details if you are interested. We have nine ways to make this work!

If you or someone you know would like to discuss their situation with me in more detail, whether it is purchasing or selling a home, please feel free to call me.

Have a Happy Valentine’s Day!!

January 2021 Market Update

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Happy New Year!  Welcome to 2021!  I predict this will be yet another exciting year with lots of new challenges, adversity, change, and so much more. The good thing to note is out of these situations come positive outcomes for many if you keep the right mental attitude, stay adaptable, and take care of yourself and those around you. We do not know what lies ahead but keeping strong is as vital as ever.

I have been asked, “what is going to happen with real estate in 2021”?  It depends on whether you are a buyer, seller, renter, landlord, or investor. Inventory levels in Northern Virginia continue to decline. We ended the year with only 1,737 houses for sale in Arlington, Fairfax, Prince William, Loudoun, and Fauquier Counties and all the cities located within this area. As you can imagine, this number is extremely low, historically speaking. This makes purchasing a home extraordinarily difficult for buyers. I am currently working with a buyer where we have bid $30,000 over list, $40,000 over list, and $50,000 over list and on three separate houses, and we have lost out on each of them. They are in the $400,000 – $500,000 price point. The listing agents said they were overwhelmed with offers and calls – one had 17 offers in hand in less than 24 hours. So, you can see the buying environment is uber-competitive. On the flip side, this makes it a great time to sell a home if you are looking to move. Depending on the price point, location and condition, sellers can expect multiple showings as well as multiple contracts with purchasers paying more than the sales price and waiving many, if not all, the contingencies associated with a sale. Renting houses is also a challenge as there is a .4-month supply of homes available, and of those, 40% are single-family or townhouses. Again, this makes being a landlord easier to get results as there is a brisk rental market in Northern Virginia. Most investors like houses that cash flow, and with prices being bid up, many investors are choosing to wait on the sidelines to see if more inventory comes on the market prior to getting into bidding wars. Time will tell if we get more inventory or not, but I believe we will experience low inventory throughout 2021. Call me to discuss your situation in more detail so we can help you make the right decisions.

So, the market that is struggling the most right now in our area is condos. In Arlington County, 84% of the resale inventory is condominiums. The average days on the market for a condo in Arlington is 76 days and the average overall days on the market for all properties in NOVA is 16. Quite a difference, right? The rental market is remarkably similar in all of NOVA – condos are on the market for 126 days, and single-family and townhouses are on the market for 42 days. Be careful when considering an investment in condos right now.

As always, I am happy to speak with you about your situation as each one is different.  Happy New Year, and as always, be safe, make wise decisions when you go in public, so you